Cryptoverse: Bye-bye to the year that broke bitcoin

Dec. 20 (Reuters) – Bitcoin hit in 2022. It ends the year he was robbed in a street, robbed of a cheap cocktail and took advantage of the bets, which were left by the establishment.

The leading cryptocurrency has lost 60% of its value, while the broader crypto market has fallen to $1.4 trillion, due to rising interest rates, eroding risk appetite and the collapse of companies including Sam Bankman’s Fred FTX.

Crypto funds saw net inflows of $498 million in 2022, compared to $9.1 billion in 2021, according to data from digital asset manager CoinShares, reflecting how mainstream finance is going through its annual nightmare. cleared the market.

James Malcolm, head of FX strategy at UBS, said that in the first half of the year he spent 70% of his time talking to clients about crypto. By contrast, during 10 days in North America last month, from Montreal to Miami, “I spent less than 2% of my time on crypto”.

Even last year, before the decline began in November, cryptocurrencies were seen as two or three years away from actually gaining acceptance from mainstream investors, Malcolm added.

“Now it’s completely in the far, far future.”

Also Read :  The Mercedes-AMG C 63 S E Performance Is A Huge-Power Hybrid
Reuters graphic

Crypto Optimists for 2023?

It wasn’t all bad for crypto, though: 2022 was also the year that the Ethereum blockchain finally pulled off its “integrated” mega-upgrade, which it described in September as proof of a less energy-efficient ” “Transfer to the system.

“This event was a technical breakthrough and the only positive event in an otherwise dark year for crypto,” said Anthony Georgiades, Blockchain Co-Founder of the Pasal Network.

“These developments will make the Ethereum ecosystem much easier to use for people around the world. With all these developments, it’s hard not to be crypto-optimistic heading into 2023.”

Ben McMillan, chief investment officer at IDX Digital Assets, said the growing popularity of blockchain-based tools including decentralized exchanges and decentralized finance was also a key development this year.

“So it’s great for the ecosystem and something to look forward to for a long time,” he added. “We could see a large allocation to digital assets when risk appetite picks up again in 2023.”

Reuters graphic


Bitcoin hit a record high of $69,000 in November 2021, the crypto market hit $3 trillion, boosted by fiscal and monetary stimulus from countries around the world trying to recover from the economic fallout from COVID lockdowns. prevent

Also Read :  Demo event ‘illuminates’ innovative tech solutions for Hanscom programs > Hanscom Air Force Base > Article Display

But as societies reopened, rising inflation forced central banks to tighten rates and investors fled high-risk assets — tech stocks and cryptocurrencies.

Bitcoin, known as a handy store of value in times of inflation due to its limited supply, flopped during the test, and investors turned to tried and tested safe havens such as Dollars that prices have increased. It fell by about a third in January, down 8% for U.S. stocks.

“2022 was a new environment for digital assets. They’ve never been in a recession or a bullish environment,” said Katie Talati, director of research at digital asset firm Arca.

In the year the bubble popped

As investors pulled out of crypto, major projects came under pressure. The first to crack was terraUSD, which is supposed to be a “stablecoin”, and its sister Luna. The coin’s value plummeted in May, with investors worldwide losing an estimated $42 billion.

Shock waves rippled through the market: US crypto lender Celsius froze customer assets in June, exposing a $1.2 billion hole as it declared bankruptcy. Singapore-based crypto hedge fund Three Arrow Capital collapsed in the same month.

Also Read :  Lights off, heat down: central Europe governments save power to set example

Bitcoin and other tokens fell by more than half in just 49 days from the end of May. In one day in June, bitcoin fell by more than 15%, its worst day since March 2020 when the COVID chaos rocked financial markets.

But the biggest crypto shock was yet to come.

In November, major exchange FTX collapsed into sudden bankruptcy. Bitcoin fell by a quarter in less than four days as banker Fred sought funds to bail out his exchange.

The cryptocurrency now hovers around $16,000. All in all, 2022 was pretty much a crypto disaster.

Or, as the economist Noel Acheson puts it, “the year the profit-inflation bubble burst revealed the structural weaknesses of an industry that had grown so big, so fast”.

  • A role in 2023? Cryptoverse will return on January 10

(Reporting by Tom Wilson in London and Medha Singh and Lisa Metakal in Bangalore; Editing by Praveen Char

Our Standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to principles of trust, integrity, independence and freedom from bias.


Leave a Reply

Your email address will not be published.